 |
| Person driving a car on a British motorway showing the dashboard and steering wheel for work travel mileage calculation. |
How Do You Claim the New HMRC Mileage Allowance to Pocket Extra Cash?
If you use your personal vehicle for work-related journeys in the UK, you could be missing out on hundreds of pounds in tax relief. Following recent updates, HMRC officially increased the Approved Mileage Allowance Payment (AMAP) rate from 45p to 55p per mile for the first 10,000 miles.
This marks the first rate increase in over a decade. If your employer still reimburses you at the old 45p rate—or fails to pay you mileage allowance entirely—you are legally entitled to claim this financial difference directly back from the government. Here is exactly how to calculate your expenses, track your work journeys, and maximize your tax rebate step by step.
What is the New HMRC Mileage Allowance?
The Approved Mileage Allowance Payment (AMAP) is a tax-free rate set by the UK government. It covers the total cost of running a personal vehicle for business journeys, factoring in fuel, wear-and-tear, insurance, and depreciation.
The updated statutory mileage rates for the current tax year are structured as follows:
| Vehicle Type | Rate up to 10,000 Business Miles | Rate Over 10,000 Business Miles |
|---|---|---|
| Cars and Passenger Vans | 55p per mile | 25p per mile |
| Motorcycles | 24p per mile | 24p per mile |
| Bicycles | 20p per mile | 20p per mile |
Bonus Strategy: You can claim an extra 5p per mile, per passenger if you carry fellow employees on the exact same business journey.
How Do You Calculate Your Mileage Rebate?
Calculating your potential payout depends entirely on what your current employer pays you. There are two primary scenarios for UK workers:
Scenario A: Your Employer Pays Less Than 55p
If your employer pays you a partial mileage rate (for example, the old 45p rate), you can claim Mileage Tax Relief (MTR) on the remaining 10p difference.
- The Math: If you drive 5,000 business miles at 45p, you receive £2,250 from your workplace. The government allowance dictates you should get £2,750. You can claim tax relief on the £500 shortfall.
Once you pocket this extra cash from the tax office, you should move it directly into a tax-sheltered account. Read our guide on how do you open a Cash ISA to save money tax-free to keep your returns away from the taxman.
Scenario B: Your Employer Pays Zero Mileage
If your employer provides no motoring reimbursement for your work travel, you are entitled to claim tax relief on the absolute full amount of 55p per mile up to the 10,000-mile threshold.
Step-by-Step Guide: How Do You Claim Your Tax Back?
The application process is straightforward and varies depending on the total financial value of your annual claim.
- Log Your Mileage Continuously: Keep a meticulous record of every business trip. You must document the exact date, the precise start and end postcodes, the total mileage, and the clear business purpose of the trip. Commuting to your permanent place of work does not count.
- Determine Your Total Claim Value: Multiply your total eligible business miles by the corresponding HMRC rate.
- Submit Online via Government Gateway:
- For claims under £2,500: Go to the official GOV.UK Mileage Allowance portal and fill out a digital Form P87 using your Government Gateway ID.
- For claims over £2,500: You must legally register for Self-Assessment and declare your motoring expenses on a standard tax return form.
Frequently Asked Questions
Can you claim mileage if you drive an electric vehicle?
Yes. If you drive a personal electric vehicle for business, you use the standard 55p AMAP rate. However, if you are driving a company-owned electric car, you must use the separate Advisory Fuel Rates (AFR) which are updated quarterly by the Treasury.
Remember, if you plan to finance a more fuel-efficient vehicle to maximize your mileage profits, your interest rates depend heavily on your credit record. Make sure you check out our breakdown on how do you check your credit score for free in the UK before applying for a car loan.
How many years back can you claim unclaimed mileage?
HMRC allows you to make retrospective claims for up to four previous tax years. If you failed to claim your business mileage expenses between 2022 and 2025, you can submit a backdated claim right now to secure a substantial lump-sum refund.